UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 49206 / February 6, 2004

Admin. Proc. File No. 3-10517

In the Matter of

Robert G. Kutsenda, CPA

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ORDER GRANTING APPLICATION FOR REINSTATEMENT TO APPEAR AND PRACTICE BEFORE THE COMMISSION AS AN ACCOUNTANT RESPONSIBLE FOR THE PREPARATION OR REVIEW OF FINANCIAL STATEMENTS REQUIRED TO BE FILED WITH THE COMMISSION

On June 19, 2001, Robert G. Kutsenda, CPA, ("Kutsenda") was denied the privilege of appearing or practicing as an accountant before the Commission as a result of settled public administrative proceedings instituted by the Commission against Kutsenda pursuant to Rule 102(e) of the Commission's Rules of Practice.1 This order is issued in response to Kutsenda's application for reinstatement to practice before the Commission as an accountant.

The Rule 102(e) proceeding against Kutsenda arose from his determination, in the context of a consultation on a particular accounting matter, that Andersen could issue an unqualified audit report on the 1995 financial statements of Waste Management, Inc. ("Waste Management" or the "Company"). The Andersen engagement team consulted with Kutsenda in his capacity as Practice Director. Kutsenda's conduct resulted in a violation of applicable professional standards because he did not require Andersen to withhold or qualify its audit report on the Company's 1995 financial statements in light of Waste Management's "netting" - i.e. offsetting - of misstatements against an unrelated one-time gain in violation of generally accepted accounting principles ("GAAP"). The undisclosed netting or offsetting distorted the Company's financial picture and caused the Company's 1995 income statement to be materially misstated. Kutsenda's conduct was highly unreasonable because he knew, or should have known, that the Company's netting violated GAAP, that prior-period misstatements of which he was aware would not be disclosed to investors, that the impact of the netting on the Company's 1995 financial statements was material and that an unqualified audit report was not warranted. As a result, Kutsenda was found by the Commission to have engaged in improper professional conduct and was denied the privilege of appearing or practicing before the Commission as an accountant, with a right to request that the Commission consider his reinstatement after one year from the date of the order.

In his application for reinstatement, Kutsenda states that he is retired and does not intend to practice again before the Commission. Kutsenda has represented to the staff that if he subsequently resumes practice as an accountant responsible for the preparation or review of financial statements of a public company to be filed with the Commission, he undertakes to have his work reviewed by the independent audit committee of the company for which he would conduct such work, or in some other manner acceptable to the Commission, while practicing before the Commission in that capacity. Kutsenda is not, at this time, seeking to practice before the Commission as an independent accountant and has represented to the Commission staff that, if he should wish to resume practicing before the Commission as an independent accountant, he will submit a separate application to the Commission. Therefore, Kutsenda's suspension from practice before the Commission as an independent accountant continues in effect until the Commission determines that a sufficient showing has been made in this regard in accordance with the terms of the original suspension order.

Rule 102(e)(5) of the Commission's Rules of Practice governs applications for reinstatement, and provides that the Commission may reinstate the privilege to appear and practice before the Commission "for good cause shown." This "good cause" determination is necessarily highly fact specific.

On the basis of information supplied, representations made, and undertakings agreed to by Kutsenda, it appears that Kutsenda has complied with the terms of the June 19, 2001 order denying him the privilege of appearing or practicing as an accountant before the Commission, that no information has come to the attention of the Commission relating to his character, integrity, professional conduct or qualifications to practice before the Commission that would be a basis for adverse action against Kutsenda pursuant to Rule 102(e) of the Commission's Rules of Practice, and that Kutsenda, by undertaking to have his work reviewed by the independent audit committee of the company for which he then works, or in some other manner acceptable to the Commission, in his practice before the Commission as a preparer or reviewer of financial statements required to be filed with the Commission, has shown good cause for reinstatement.

Therefore, it is accordingly,

ORDERED pursuant to Rule 102(e)(5)(i) of the Commission's Rules of Practice that Robert G. Kutsenda, CPA, is hereby reinstated to appear and practice before the Commission as an accountant responsible for the preparation or review of financial statements required to be filed with the Commission.

By the Commission.

Jonathan G. Katz
Secretary

Endnotes

1 See Accounting and Auditing Enforcement Release No. 1409, dated June 19, 2001. Kutsenda was permitted, pursuant to the order, to apply for reinstatement after one year upon making certain showings.

Rule 102(e)(5)(i) provides:

"An application for reinstatement of a person permanently suspended or disqualified under paragraph (e)(1) or (e)(3) of this section may be made at any time, and the applicant may, in the Commission's discretion, be afforded a hearing; however, the suspension or disqualification shall continue unless and until the applicant has been reinstated by the Commission for good cause." 17 C.F.R. § 201.102(e)(5)(i).